Regardless of rampant volatility on the crypto market, businesses are transitioning their transactions and settlement operations to decentralized currencies, effectively taking up the share of Bitcoin payments that had previously been occupied by private transactions.
The heavyweights of the global economy are also making the transition to digital currencies. The reasons for such migration are obvious, as companies are always on the lookout for new opportunities, and clientele is constantly evolving. It is becoming clear that the majority of new entrants into the cryptocurrency frontier on the part of major companies is attributable to IT and other high-tech sector participants. Such a trend is a clear response to the use of cryptocurrencies as means of payment by a growing segment of their target audiences.
However, despite the relatively high degree of tech-savviness among modern crypto users and the audience that has heard of them, not too many are willing to start using or holding such assets. The reasons for such apprehension are largely based on the fact that there are insufficient educational materials and guides available and propagated via reliable sources to explain the basic steps required for using such digital assets as means of payment. Another major factor is volatility, which is being blamed for the slow adoption of cryptocurrencies among broader strata of the population.
Why Use Crypto – The Advantages
In fact, there are numerous advantages for using cryptocurrencies as an alternative to fiat funds. These advantages relate not only to the buyers, but the sellers as well.
The use of cryptos as a means of payment, first and foremost, ensures the instant transmission of the funds necessary to the seller. This makes the transaction instant, meaning that buyers will not have to wait for banks, gateway operators, merchant services, and other third parties to validate the transaction and then send a confirmation to both parties to it. This leads to a faster exchange environment and allows both parties to bypass the need for intermediaries.
Greater transparency and instant fixation of the transaction amount are another advantage that plays in favor of the buyer. Since the transaction is instantaneous, the buyer will know the exact amount they will have to pay at the instant of the transaction and will not be surprised by sudden changes in the amount subtracted from their balances if the transaction were to have taken place after being processed by a bank some days later.
Ease of use is another major advantage that allows users of crypto assets to have their entire portfolio with them and choose which coin to use for a transaction. The availability of a multitude of crypto banks with dedicated cards, convenient wallets with extensive functionality, and exchanges further facilitates this process in favor of the buyer. In addition, the ability to send BTC to PayPal as a major payment facilitator greatly accelerates the transaction process.
Merchants that accept Bitcoin and cryptocurrencies are taking advantage of the same benefits that buyers are in technical terms related to transaction processing. However, as online stores that accept Bitcoin are also being awarded the possibility of avoiding high commissions that are usually charged by gateways like MasterCard and Visa for transaction processing.
Another major advantage is based on the marketing side of using cryptos as an accepted means of payment, since a new breed of buyers will be attracted to such merchants.
Cryptocurrency payments do not require much effort to be incorporated into websites or payment acceptance terminals, as all that is required is the necessary API and relevant solution provided by a merchant service. Such services are often considerably more convenient and client-oriented than even the most reputable banks, since competition among them is fierce, and finding the best terms is just a matter of market research.
Last but not least, the trustless nature of cryptocurrencies and the underlying smart contract system ensures the execution of the “if – then” scenario, which means that products and services are delivered only upon payment or delivery of the goods, thus avoiding many of the disputes that usually arise in trade relations.
Who Accepts Crypto As Payment
There were 15,1474 businesses accepting Bitcoin and other cryptocurrencies at the time of writing. The list of companies that accept cryptocurrencies is growing rapidly as new businesses from a variety of segments and industries are joining the cohort of merchants taking their first steps of transitioning into the fully digital and decentralized economy of Web 3.0.
Among the industries that are integrating crypto payments is fast food as companies that accept Bitcoin as payments now include Burger King, which is the latest of the giants to unfold such options in Venezuela. The Restaurant Brands International brand that operates the burger joint is making the move to decentralized currencies to start leveraging their popularity among the nation’s youth. Among other giants of the food industry in the crypto league are Starbucks, and Yum Brands, which operates KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. Coca Cola is also testing the possibility of accepting cryptocurrencies through Bakkt.
Big tech is the biggest acceptor of Bitcoins with PayPal, Tesla, Microsoft and Nvidia leading the trend in crypto adoption and sales of products for digital assets. The giant eBay has also announced that it is in the process of organizing acceptance of cryptocurrencies as a means of payment in the very near future.
Travel and tourism are also on the list with Expedia, Cheapair and Virgin willing to sell their services for Bitcoin. The popularity of travel services for crypto is growing, considering that car rental companies are also starting to offer car sharing rides for crypto.
The retailers that accept Bitcoin are the biggest adopters of Bitcoin payments in recent times with such giants as Overstock, Whole Foods, Newegg, Home Depot and others already accepting cryptocurrencies as means of payment on their websites. Among the marketplaces that accept Bitcoin are Rakuten and Etsy, where individual sellers and merchants can incorporate crypto acceptance facilities on their sites. Despite such popularity, it is not true that Amazon accepts Bitcoin, only as gift cards.
How To Use Crypto As Payment
To start using cryptocurrencies as a means of payment, users willing to do so must first have a crypto wallet that is going to contain their digital assets. There is an endless variety of wallets on the market and most of them are hot wallets – meaning they are always online and connected to the internet. Though considerably less secure than their cold, offline counterparts, hot wallets are very convenient for use and are ideal for using the crypto assets contained on them for payment.
The use of cryptocurrencies on a wallet can take place in two main forms – a direct payment from one crypto wallet to another, or through conversion of crypto assets from one wallet into fiat and their transfer to the destination account, which is usually a banking account registered to a merchant. Most quality wallets offer automatic conversion of crypto into fiat without any additional steps. Others offer users the chance to select which of the cryptocurrencies on a wallet is to be converted, thus adding convenience.
There are also specialized startups and fintech companies that offer quasi-banking services in the form of crypto bank cards that act just like real bank debit cards tied to a crypto account. They also have a number and a pin code, and can be used to pay for goods and services with average POS payment terminals at merchants that accept cryptocurrencies or not. The crypto bank card operator will automatically convert the cryptocurrencies to fiat to make the transaction.
Such contactless payment terminals have become extremely popular among crypto users and even average fiat holders during the pandemic, as the fear of contracting the disease made most people avoid cash altogether or physical contact with terminal numpads. Apart from payment terminals, crypto payments can be made using a QR code. The merchant issues a code specific to a product or service and sends it to the buyer. The buyer then scans the code and confirms the transaction that is processed instantly. Crypto wallets also have such payment functions preinstalled and merchants simply need to install the necessary API to have access to such functionality.
Some sales terminals are also available to merchants with blockchain-based payment facilities that allow their clients to accept cryptocurrencies just like fiat. The only difference will be that crypto payments will be processed using blockchain networks and transferred to a crypto wallet, while fiat funds will be transferred to a bank account.
Online plugins for merchant websites are the simplest and most accessible form of crypto payments that merely need buyers to be redirected to a payment page, where they can enter their wallet number and confirm the transaction to have the necessary amount credited.
Overall, crypto payments have become as convenient and simple as using fiat. The only difference is the origin of the digital assets and the tools used for conducting payments. But the latter have already taken the shape of traditional instruments, further blurring the line between fiat and digital currencies.